Question

ST. CLAIR COLLEGE OF ANALNO ARTS & TTCHINOLONY IBM2003 Logistics Management 3. What is Reverse Logistics? - Discuss how reverse logistics can create value in the Supply Chain? - Provide 3 examples and explain in detail. din tim

Answer 1

Reverse logistics is the transfer of the product from the customer to the distributor or the manufacturer. It usually takes place after the product is sold to regenerate its value towards the end of the product lifecycle. The product is sent back to the manufacturer for the purpose of servicing, recycling or refurbishment. Reverse logistics can create value in the supply chain because the product is returned can either bring revenue after bring refurbished or a scrapped product can be used for parts and components. It helps in extracting more from a product after it has reached the end of its lifecycle. Also sometimes the product is returned due to the defects in the product or errors in the delivery process. In that case, reverse logistics will help in understanding the mistakes and avoiding them again. Hence for all these reasons reverse logistics create value in the logistics.

For example, if a product is returned for refurbishment or repair, it means the product is no longer good to use. It could be a waste and thrown away if reverse logistics did not take place. Reverse logistics will create its value by repairing it or its parts good to use. In the automobile industry, automotive components are remanufactured and sold such as engines, fuel injectors, clutches etc. Another example of reverse logistics being beneficial practice is the disposition of food products to generate energy. The organic waste from the food products can be converted to generate energy. Also, a product which did not fulfil the mentioned quality as expected by the customer and the defect makes the product unusable, returning it will let the manufacturer analyse the flaw, repair it and make sure it does not repeat. These practices can help in increasing the efficiency of the supply chain and thus creating more value to it.